What is the role of IMF?

IMF provides loans to countries like Pakistan for infrastructure projects. IMF has an interesting
relationship with an interesting country Pakistan. A country facing problems like a rapid growth
population ,sizable governmental deficit ,a heavy dependence of foreign aid governmental instability
,terrorism and large military expenditure .Pakistan economy is dependent on foreign aid agencies such
as IMF.

When IMF credit loans it imposes certain conditions on the borrower and privatization is one of them.
Sometimes imposed conditions are too demanding .in an interview with Riz khan ,while talking about
conditions being imposed on Pakistan .Dominique Strauss kahn ,former director of IMF said:

“We are not working as charity for Pakistan”

Excessive external debt is often responsible for negatively effecting the economic growth which creates
uncertainty and discourages the private sector from investing in the economy for fear about the stability
of the government .

For this under Nawaz Sharif government , privatization process began to be implemented with the
establishment of Privatization commission of Pakistan.

Privatization commission of Pakistan

Privatization commission of Pakistan was established in January 22,1991. Mission statement of

privatization commission is

Privatization in an open ,

Fair and Transparent Manner,

For the benefit of the people of Pakistan,

In the right way to the right people

At the right price

Members of the pc board

Chairman of privatization commission of Pakistan is Muhammad Zubair

Secretary of privatization commission of Pakistan is Sardar Ahmad Nawaz

Objectives of the Privatization program

1 to improve the operational efficiency

2 to reduce the financial burden imposed upon the government by public enterprises.
3 to promote and strengthen the capital market

4 enhance the attractiveness and visibility of Pakistan as a favored investment destination.

Strategic Plan

 It provides reasonable compensation to employees

 Avoid concentration of economic power in a few hands and to secure widespread ownership of
assets being divested
 period  governing party  total privatization
/institution proceeds raised

 Jan 1991-july 1993  PML-N  Rs.12.0bn

 Oct 11993-nov 1996  PPP  Rs 44.9bn


 Feb 1997-oct1999  PML-N  Rs 2.0bn
 Oct 1999-nov 2002  Military rule  Rs 38.7bn

 Nov 2002-nov 2007  PML-Q  RS .377.2bn

 MARCH 2008-march PPP  Rs 1.3bn
2013 
 Jun 2013 to date  PML-N  RS 172.5bn


Impact of privatization in Pakistan

According to October 1998 report by the Asian development bank analyzing the impact of privatization
in Pakistan in the 1990s only 22 percent of the privatized units performed better than in pre
privatization ;44 percent performed the same whereas 34 percent performed worse.

The current government took office with a strong mandate to implement ambitious economic reforms
to stabilize the economy and put Pakistan to the path of growth and prosperity. the governments plan
focuses on strengthening macroeconomic and structural policies to shore up confidence ,reduce
economic imbalances ,provide employment opportunities.

References

Privatization commission newsletter..

https://www.ukessays.com/essays/economics/the-role-of-the-imf-and-world-bank-in-pakistan-
economics-essay.php

www.imf.org